Transcripts For CNBC Squawk On The Street 20140113

Well. Road map begins with retailers suffering the same fate as target. Neimanmarcus is among those whose Customer Data also breached. Hear what targets ceo told becky quick, next. Ford unveiling a big change to f150 pickup truck, using aluminum in the body. Alan mulally will join us in a moment. Suntory planning to buy u. S. Based beam for 14 billion after accounting for assumed debt. Target is not alone when it comes to data breaches. Neiman marcus says mack hacker may have stolen information. In an exclusive interview, target ceo telling becky quick, the retailers accountable for the data breach that affects 10 million customers. The full extent is not known but malware installed on the point of stale registers. Target working with Law Enforcement to determine who did it and when it was done. Also steinhafel says target has work to do regaining customers trust. Challenging times for target, i can tell you that. Its a real. In the gut. Throughout the crisis, weve had a singular focus on doing the right thing by the guest. Were a company that has been here for 51 years. And weve focused on the guest and made the guest our priority for that entire time. We knew we know that our guests trust in us is shaken. But we know they love our stores, they love our brand and were going to learn from this experience and work really hard to become even a better retailer over time. Nice job by becky, guys, talking to him about what they knew and, clearly, they did know before they let us know. His excuse, they had to get call centers and stores ready. Digging is not done, by any stretch. No. This has become, when you say neiman, its commonplace. You hear people talk, stevenson, saying well get information on your phone. You know, im losing trust in the system. I dont want to put all of my information in this phone. They already got my information in credit card. I do believe this is kind of like when i listen to what happened to arod, theyre all juicing. Maybe until i find customers literally going to someone who hasnt been hacked, it hasnt happened yet, im not going to pay as much attention. The goldman upgrade to targets working. Targets going higher, not lower. Right. I mean, listen, this is a concern, a continued concern, only growing, as time goes on, one would imagine. Think about the different venders who have your credit card information. Everybodys got it. Its everywhere. And we know the thieves are only getting more sophisticated, as are the defenses against them. But all they have to be right is once, as they often say, in terms of attempts to make to try to breach a network or anything else. Not to mention, theres a lot of cost here, of course, for the credit card issuers and thats something of a dispute in huge breaches like the one we saw at target. I dont want to make any investments based for or against this kind of story. I continue to also believe that, when you get your credit card, you feel terrific, not because of the retailers but because of the banks. Everyone hates the banks, completely hatable. Im indicting right here, ill get 2 billion from jpmorgan, before i file the indictment mg if they pay me 2 million, ill drop the indictment. In the end you get your credit card, if theres a problem, its adjusted. Its a great system where the banks protect you. I think the banks dont get enough credit. If you Say Something good about the banks, you might as well be trying to stop traffic, i dont know how, in lincoln tunnel, trying to redirect traffic. Im not going to get into receipt direct traffic game. Certainly not doing much. The target storys not doing much to make up for the weakness in consumer names today. Bad news out of express, bad news out of soda, bad news out of lulu, cutting outlook for the Fourth Quarter, january meaningfully weak. Wow. Negative comp, slow to single digit. My favorite, bonton, i remember when it was hess. Adverse weather, treacherous travel conditions, december. I mean, lululemon did well in december it wasnt treacherous. You read these releases they all have the same category, same qualifications, which is that where was the customer . This that is traffic issue that Howard Schultz wrote a week ago, now were starting to hear about it. No issues at macys. Why . Maybe if omni channel, macys is combatting against amazon. I think lululemon, new ceo, clearly problems there. Express, very wellrun company, not doing it. L brands, very well the very wellrun companies are being hit. They are being hit. They are being hit. In the mall. Those who jump to the larger thesis, a major diversion where retails going, its really just about online and amazon and others competing. It is. But you can do that when you think about macys and, therefore, done that argue against the idea that it isnt just about execution to getting it right . I think that macys somehow, the omni channels working. I think this is store traffic. People didnt shop as much. Now we can blame the weather or say its something secular. They shop on amazon. Walk around with mobile devices and, right check that. Going to the mall does that explain soda . Sodas going to open 16, 17. We should have figured that after we saw bed, bath and beyond did a bad number. Bed bath sells a lot of the soda system. People like our friend herb greenberg, hes been saying its a matter of time that soda hits the wall. Soda really hit the wall. And you know it they used the term disappointing to describe themselves. Typically you let others describe that as disappointing. Margins hit, higher cost, hope to restore historical margins some time in 2014. Express news, whats disconce disconcerting to some, its not a comment on holiday, its about january. January theyre saying, meaningfully weak traffic. I know. I met with express i was surprised stock isnt down more, but its a wellrun retailer. And these are all about traffic. Thats a big mall base play. Honestly, sodastream, a lot of hype. I think theres a lot of hype involved with sodastream. Its a gadget, i think the gadget, everybody who has one, i personally believe has one, and i dont think, by the way, lets be honest, soda has peaked. Take a look at one of great Conference Calls you know i like clause hating me for liking him. I dont like the number but i like clause. Clause is overrated because of you, fine. Sister, mother. But heres the problem, he said that stop it he said sodas doing badly. But guess whats doing well . Tell me. Monster. Monster beverage. Monster those kind of drinks. Monsters doing well . Yeah. I would have thought the wellness side but that aint wellness. Teenage, i think a split between vegans and people who like high octane. Like my nephew. Namely you. I do not drink one of those fivehour energy drinks. I tried it on a friday and went to bed on monday, that was it, the whole weekend. Save your energy for this. Ford making a big splash at the Detroit Auto Show with its new f150 pickup truck. The bestselling vehicle in the country for 32 straight years. Will this lighter aluminum truck be what ford stock has been looking for . Phil lebeau joins us with alan mulally, ceo of ford motor. Good morning, phil. Good morning, carl. As we talk with alan mulally here, you just showed the new aluminum f150, and a lot of people at home are say, is it durable enough . Will it hold uf . Give us perspective on testing youve done there. Sure. Also i know a lot about aluminum, as you know. Thats true, with your background. To your point, we just revealed today. Response has been fantastic. A Value Proposition for the series is the aluminum cab and box. It will save us over 700 pounds then we can downsize engines, improve fuel efficiency. Aluminum, pound for pound is tougher than steel. In the past weve not had volume and pricing has been higher. Well introduce on the highest volume vehicle that would benefit from it the most. I think customers are going to value the toughness. How close do you get to 30 miles per gallon . Many have said its the holy grail mark. Our objective to lead in fuel mileage. Youre at 23 now. Well continue to do that. Well release those closer to when we release the vehicle, the actual numbers. Remember the ecoboost engines improve fuel feshts efficiency you wont gives a firm name . We wont release that today. Our first chance to talk to you since you made the announcement last week, im done considered for the possibility of ceo of microsoft. Not getting into details about the conversations, is what you said, but you wanted to remove any kind of question about your future at ford. Do you feel like the last several months were a distraction, as this was playing out with microsoft . No, i really dont, phil. The ford team has been laser focused. But clearly, im very pleases to get speculation behind us. I love serving ford and im committed to the ford team and the ford plan. This years so exciting for us. 23 new vehicles, twice the number weve ever done. And we are now filling out that complete family of vehicles worldwide. Im pleased about serving ford. Will you stay just this year or do you stay beyond this year . We havent changed our guidance. Ill stew through at least 2014. At least . Thats the guidance. Jim cramer has a question. Jim. F150. Its beautiful. Im a 350 guy. Super duty guy. I like this. Theres one out front. Whats the year profitable growth for all . What is the plan dividend ultimately . Remember, this week, three years ago, stock was at 18. I believe that the dividend is the driver, how high can it go. Our plan, jim to continue the dividend, even through a downturn, even as we had last time. Well increase dividend, because its very important part of the return to the shareholders, as you know. But we are getting guidance about what that maximum amount would be. Clearly, our intent to continue to do dividend, no matter what, Going Forward with the environment. China, very positive commentary. Yes. Europe talking about bottoming, latin america doing better, worse. Story, overseas . United states youre hitting on all cylinders. I think china continues to be a really fantastic opportunity for us to serve, jim. Our sales in china alone, last year in 2013, were up over 50 . Were also increasing our production cape ability with the new Assembly Plan in chong ching and accelerating new vehicles in china. Its a very important market and they love the ford brand. I think the industry will be around 22. 5 million to 24. 5 million, jim, this year in 2014. With the economy growing around 7. 5 . I think were well positioned to serve china. Alan, thank you. Phil, take it over. Welcome. You talked about the china economy. Talk about the u. S. Economy. The jobs report last month had a lot of people saying, whoa, whats going on . Are we ready for a bumpy 2014 . Whats your view about the economy and prospect of greater job growth . You bet. Well, everything we see now between the fiscal and monetary policy, we think the u. S. Economys going to expand upwards of 2. 5 for next year. In fords case, we still have tremendous pentup demand, as you reported, nearly 11 years average age. With our family of vehicles and the quality and the fuel efficiency and safety and value, you can economically obsolete your vehicle by buying a new ford. We see a good, expanding economy. Do we see job growth kick in more . We are going to high another 11,000 employees worldwide, another 5,000 employees to support our increasing production in the United States. You see a broader economy, the job growth growing, beyond ford and Auto Industry . Absolutely. Were seeing it in all sectors which we support, especially housing and construction business, energy sector. And they love, as you know, they love the ford trucks. An aluminum one. I cant wait to drive this. Its going to be fun. Well see what mpgs wind up being. Phil lebeau in detroit at the north American International auto show. When we come back, costcos cofounder and former ceo, whats his take on the data breaches involving target and Neiman Marcus . A look at feutures s p and nasdq with a positive week last week, but the dows had two winning sessions this year. More squawk on the street. Thats a good thing, but it doesnt cover everything. Only about 80 of your part b medical expenses. The rest is up to you. So consider an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement insurance plans, they could save you in outofpocket medical costs. Call today to request a free decision guide. 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Going to create a japanese global champion in what is the key growth area in the spirits business, namely, talking whiskey. But jim beam, certainly. Bourbon, this area a key growth market. A very big price. 20. 4 times,ebida, paying 20 years worth of ebida. The two Companies Began talking seriously about a deal after thanksgiving, although suntorys been around the block a little bit, is my understanding, having spoken to people close to the situation on both sides with this company. Remember, beam was spun from fortune brands, ackman took an activist stake, fortune brands had moene faucets. And of course beam. Spin beam. And from the time it was spun, it was a takeover candidate as a Large Company in this area that is independent, that was not controlled by a family. So you have this deal getting done. They started, one would expect, lower price than where they got to. A full price, many will tell you. Yes. The idea that a pernault would be able to compete theyd have to spin or sell brands. Perault a fair balanced sheet so the idea to take on the necessary funds to do this deal, unlikely. A very high multiple, which is the reason they were willing to sell. A lot of people in twitter saying jim beam, not a great mand. No, this ismakers mark. This is salsa, a tequila, we serve looking at me, the restaurant, im involved in sales, a lot of sauza. En expert in tequila. The great growth. Sauza was on squawk last week, asking is it a fad . I can tell you, this is the fastestgrowing clear beverage. A lot here. Once beam spun off the fortune home and security, people said, remember, the old american brands. Once they deconglomertize, its a very, very fast growing business. Remember, constellation last week had a great number. Suntorys a private company, we should point out. Shareholders are not going to get upset for paying what seems to be a full price. Beam shareholders we havent heard from mr. Ackman, who i believe holds a stake here. One expect they will be happy with it. They have to be, geez. I dont want to prejudge. Premium over what was a strong stock price. Theyre having repisado. Two years. That is say . After a while it takes like sherry. Two Companies Already had a Distribution Agreement where suntory was distributing beam in japan and i think beam was distributing Suntory Products in singapore. They have some history together. But thats a real one. 14 billion, premium. Almost willing to say, weve got a merger a consumer you cant get the second word out. I want two. We dont talk about Foster Wheeler, so its tiny 3 billion deal. Beam is a big name. And cross border, which we heard there will be a lot of. Japan into u. S. , china into u. S. , its important. Youre making me bullish. Boy, this year started really tepid. Its started like beam, its moving tomakers mark. Yeah. Some are saying, lets hope this isnt the biggest deal of the year to come. Please, no. Last year we got heinz, all excited and that was it. When we come back, heating up your portfolio. Cramers on the case. Well get his mad dash, as jim said, futures are looking soggy but a lot to come. Goldman on twitter. You talk about on mad dash. Customizable charts, powerful screening tools, and guaranteed onesecond trades. And at the center of it all is a surprisingly low price just 7. 95. In fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. Im monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Im bethand im michelle. And we own the paper cottage. Its a stationery and gifts store. Anything we purchase for the paper cottage goes on our ink card. So you can manage your business expenses and access them online instantly with the Game Changing app from ink. We didnt get into business to spend time managing receipts, thats why we have ink. We like being in business because we like being creative, we like interacting with people. So you have time to focus on the things you love. Ink from chase. So you can. [ man 1 ] were now in the approach phase. Everything looking good. Velocity 1,200 feet per second. [ man 2 ] your looking great to us, eagle. 2,000 feet. Still looking very good. 1,400 feet. [ male announcer ] funny thing happens when you shoot for the moon. Ahh, thats affirmative. [ male announcer ] you get there. Youre a go for landing, over. [ male announcer ] the all new cadillac cts, the 2014 motor trend car of the year. All right. Time for mad dash on this monday. The market im having trouble if its staying down. So many different pieces of good news. Take wendys, right in the fifs the sell call last week, reporting better than expected numbers. Big accelerated buyback good news. Wendys is the third way between panera and mcdonalds, fresh and juicy, i love going there. Fresh and juicy. Theyve remodeled. Theyve got tv. The game on yesterday. I like buying short hills, a fantastic one, had a great meal there yesterday. What did you eat . The double not the baconator. Double cheese i eat half. 50 milligrams of lipitor or 100. You need the new regenero when lipitor doesnt do the job. Twitter, this is accelerating the pace of product innovation, remain a buy. Goldman sachs saying over the past quarter, significant acceleration in Twitter Product innovation. So were back. Twitter, suddenly product invnovation. The banker, david, theyre the banker. They are. Banking analysis or well, glad you brought up, very separate, yes. Theyre like a 31yearold and 56yearold getting together, thats how far, theyre separate from each other. So far. Its an illusion to the man who stopped research from being monetization, early stage. Its not happening yet. Its not happening yet in terms of earnings but ebida, get this, david, raising our ebida 2013, 2015, by 10 and 9 on average and revenues raise. Something to hang your hat on. Perhaps go with a higher price target for a stock up 121 since its initial public offering, the opening bell a few minutes away on monday morning. Lets see how stocks do. Squawk on the street coming back after this. Bulldog out with the old out with the old and in with the new mattress discounters year end Clearance Sale ends monday puppy whats this red tag mean . Bulldog through monday, save up to 40 on clearance mattresses. Puppy oh, heres another. Bulldog that means up to 300 off serta, posturepedic, even tempurpedic. Puppy i found another red tag bulldog what where . Puppy right here, silly. Hahaha bulldog tickles mattress discounters year end Clearance Sale ends monday. Mattress discounters visit truecar. Comoney,com,t and never overpay. Yers remorse. A good deal or not. 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[ male announcer ] stick it to the market before you get stuck. Get the most extensive charting wherever you are with the mobile trader app from td ameritrade. Youre watching cnbcs squawk on the street on monday morning, live from the Financial Capital of the worlder. The opening bell in about 20 seconds. Hope you had a good weekend of football, Golden Globes last night, of course. Getting back to work, though, as the market continues to be tepid, as jim said. Only record so far this year, the dow transports and russell 2000. I think this is good news. I hate openings on mondays. I like down openings, buyers will come in. A look at s p at the top of the screen. Down here at big board, ford motor company, highlighting its new ford f150 aluminum truck. Shaved 700 pounds off of the truck. The new plans that alcoas opening in order to meet demand for this. Interesting. Davenport. At nasdaq, Royal Bank America celebratingi its 50th anniversary. Juniper networks, urged to buy back more shares. A 13d filed his this morning, elliott, Aggressive Hedge Fund in any variety of asset classes. We know them in distress but extraordinarily active in technology to wit river bed last week, for example, making a bid there. Here, 6. 2 stake, call it 31. 4 million shares, saying they believe, juniper should drive lo longterm value on Product Portfolio on timization with the steps. The stock could get as high as 35 to 40 bucks a share. Take a look at paul singer. A younger guy, jesse cohen. Both activist as elliott in many of cases, quote, we hope we can work with management and the board in a friendly and collaborative manner to institute necessary changes and put juniper back on the track to success, jim. Juniper was 35, 40 stock. One time the highest flyer. People felt they had Better Technology than cisco but werent implementing it well. Great balance sheet. All of the Tech Companies remind me of the old Consumer Products companies that had they had a lot of cash on the balance sheet, werent doing what was necessary to bring out values. Maybe they should merge. Juniper, put together river bed, juniper, a couple of others, you might be able to have a powerhouse. Its not what people think about with technology, but alcatel and lucent did that, thats on the mend. I think this is a substantial story. Tech companies with good Balance Sheets that havent executed, look out. Look out. Seem to be a number of them out there. Elliott, by the way, making a case going one by one to some of the names, whether it be a co compuware or juniper. Compuware undervalued to me. But all of these share the characteristic, they have Randle Stevenson talked about the huge, huge amount of honey that his company spends just to go from 3g to 4g. All companies in foot race to get more. My travel trust owns siena, they have momentum but theyre spending a fortune to get the business. They are going to get it. A lot of money up for grabs from carriers and people have said, why isnt juniper getting more than its fair share. What the activism is saying, yeah, is it managements fault. I think its really novel. Wow, tech, it gets obsolete quickly. But these are big. River bed, people had a sell. Juniper, people have given up. Dont give up on techs theres a new sheriff out there. For today, some are giving up on various consumer names, soda, express, lulu. But costco, gap, housing stocks are down, sherwinwilliams, whirlpool, leading the losers today. I think a lot of those are mistaken. I think whirlpools doing well. I think home depots doing well. The secular trend for housing being built, i wouldnt be surprises if the stocks reverse. When you have express and bonton a lot of outliers. Costco reported a good number. I would not be a seller of costco. Commerce is doing fine. I think that we dont want to get lost in the fact that some of the companies are gimmicky that are, i think sodas a gimmick. I think its a gimmicky thing. People arent drinking soda the a they used to. A declining category, thats very difficult. You mentions wendys earlier. Q 4 north America Company operated comps up. They see 150 basis points of margin. Upped Earnings Guidance ass s as they get a right hook. I want to point out, nelson pelts the drive of wendys. A long time. But i think one of the things to think about is why, the heck was everyone negative about this one . I think theres a lot of people feel theres no room for them. Untrue, plenty of room. Plenty of room. One that is stresses out is mcdonalds, mcdonalds has to come up with a formula that feel its fresher products. Some i would say creeping skepticism on starbucks down a half percent today. Yes, yes. Dunkin donuts saying the whole state of californias open to franchises, as they make their westward push. Its about time. Theyve been really darrell lick moving east to west. Star bucks, people concerns its not a strong quarter. Im not concerned. Starbucks moved up a lot. This is where the sogginess is, people say, whats going on with retail . Amazon, when i get my cappuccino, even when delivered by helicopter everybody its still late. Still late. You want it fast. I dont get chopper when its ice coffee, its okay. Howard shut is not being amazoned. Goldman ups price target to 65, raise revenue projections nobody is shortening it today. The company in their words, accelerating pace of innovation. That is enough . I think that twitter is one of those companies that people want to own. When i sign books, people want to own know more about google, not twitter. They feel twitter is people have some have gotten religious. When they hear theres no valuation that you can pin on twitter, theyre neverorve nerv. They dont want to get hurt by twitter. Ebida going up, banker inspires people to take another look at it. You mentioned google. 1138, as onnen himer takes price target from 1067 to 1220. Waiting for them to monetize youtube. When they do, look out. The idea of mall traffic being down, i have noticed shares of sears continue to fall. Below 4 billion market value is sears. The stock down about 11. 7 for the last 12 months, 36. 11, down 1. 6 today. Yeah. I dont see a secret weapon there. Every time theres a great deal of weak innocence that stock, given its controlled, there does seem to be something, although at this point theyre already exploring the auto centers, lands end, all of those things in process. Selling good things. What would the good news be . Worth more than we think other than a strong earnings report. Thats what would help. Macys and costco the stronger ones. One that im kind of really miffed about is noodles, they did a big secondary, noodles, in the first week of december. This morning they report very, very soggy numbers, stocks down five from when they did the secondary. This is a stock i had great hopes for. I think the food has trying to figure out where panera is, where chipotle, wheres mcdonalds, burger king. I thought noodles could be in the middle. Maybe its a craze. Calling the end of the ramen craze already . Thats a big limb to go out on. You want to do that . I cant. Ramen place, land office bis, business. That was the first lease i wanted and they heard it was cramer. Thought it was cosmo cramer . I wish it were. Im paying real rent. Noodles and company is simply not executing well. Initially we heard that the colorado storms he they are denverbased company, was responsible for the weakness. Now im suspicious and skeptical. Maybe the model isnt as good. A lot of Restaurant Companies came public and maybe not all created equal. The education curve on the new issues is a steep one. Someone telling me, jim, time to look at blooming, which is outbreak steak. Blooming was at 16, is it time to look . Have a bloomin onion, for heaven sake. Take life savers. Binaca what happened . They use things, you know, breath mints. I guess. They have good ones at starbucks. Starbucks is done. Lets see whats moving. Flat open if you look at the dow. Health cares the leader. Banks to a lesser extent but health care the leader. Utilities, energy, material on the weak side. Also weaker, retailers. Im getting concerned about the level of comment tear from the big retailers that are out there. You know the whole story . Good thanksgiving, weakens, promegsle, extended promotions for a while, now going through into january. Lululemon, not only cutting earnings in revenue guidance, but the ceo saying weve seen traffic and sales trends decelerate meaningfully. Express came out, cut Current Quarter outlook. Ceo there, mike weiss, january traffic to date has been weak, and we have remained promotional and expect to maintain the stance throughout the month. Pbh didnt cut their fullyear earnings outlook, they reaffirmed but cut fullyear revenue guidance, due to discounting during the Holiday Season. So the trend continues. Remember last thursday and wednesday night we got earnings essentially warnings from bed, bath and beyond cignet, american dollar, down noticeably last week. Bed, bath, beyond hasnt recovered, down 12 . Cignets down notably. Those stocks are in trouble. Retailers in general have had a rough time. You see the numbers for the last few days. Not all, American Eagle bounced back a bit. Tale of two restaurants, wendys and noodles, wendys jumping after raising its 2013 guidance. Noodles falling after preliminary Fourth Quarter results below the streets view. General motors doing very well today. Considering they announced recall of 370,000 pickups for a fire issue. Cfo saying this is the closest they have been in a long time to reinstating a dividend. Thats in important because a lot of firms institutional companies will be able to own it once they start paying some kind of dividend. Kudos to them. North american truck and car of the year, corvette and silverado. Corvette, they said sold out. When was the last time you heard about a car sold snout every car, corvette, sold out right now. Good for them. Fords got a new f150 pickup truck here. Talking about suntory. I wont belabor the point other than to note, its trading up, should be up 25 . Exactly what the premium was there for it. Beam was taken over. When was that . Fortune brands, i think 2011, that was 50. Since then its gone nowhere but up. Alcoholic Companies Trading to the upside. Diageo the exception. When we come back, netflix gets a message from the Golden Globe Awards involves a popular social media name, next. Santa fee making news. A live interview with the ceo. Stacys mom has got it goin on stacys mom has got it goin on stacys mom has got it goin on [ male announcer ] the beautifully practical and practically beautiful cadillac srx. Lease this 2014 cadillac srx for around 319 a month with premuim Care Maintenance included. So ally bank has a that wont trap me in a rate. Thats correct. Cause im really nervous about getting trapped. Whys that . Uh, mark . Go get help i have my reasons. Look, you dont have to feel trapped with our raise your rate cd. If our rate on this cd goes up, yours can too. Oh that sounds nice. Dont feel trapped with the ally raise your rate cd. Ally bank. Your money needs an ally. Welcome back. How is everything . Theres nothing like being your own boss and my customers are really liking your flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. Everything tonight everything tonight a lot of nominated shows tonight are actually on netflix this year. Netflix, big deal. House of cards, orange is the new black, yes. And enjoy it while it lasts, because youre not feeling smug in a couple of years when snapchat is accepting best drama. Amy poehler and tina fey at Golden Globes last night. Whos smug is those who held it last year. Poehler not able to cover her short. Nice attempt, obviously, if she disclosed she was short, i would have liked her more. Robin wright did win. Fabulous. They are bringing back lilly hammer, Stevie Van Zandt series. Interesting to see how much they commit, what original content strategy turns into, how it changes and so forth. I think that netflix is, again, look at entirety of the company, if it continues to maintain, the subscriber growth, stock is going higher, it is. Recent downgrades argue otherwise. We talked about that. We did. The idea being, how can you with heightened competition, now some argue compatible services, but some point they may be more competitive. Amazon prime, not to mention goog google. Netflix trends are star. Countering the poehler post. Snapchat probably worth a gazillion. Just the Insider Trading thing. Talking about snapchat all all in two years. No, it will be acquired by somebody. Well see for how much. I still think back to when i interviewed the u. S. Attorney and didnt know what snapchat was. Snapchat has a corporate version to say, i hear that beams going to get a bid from suntory this weekend and disappears so you have no evidence trail. Yeah. Nsa will figure out a way. Nsa will . Absolutely. Do you think theyre snapchat will not be able to avoid the nsa. Theyll grab it in ten seconds. What happens if the nsa is behind target hacking . Dont even. Where are you going . Oh, three days in the condor here. Bring back nixon. He would have been spying, said, i want these people spied on, not them, these people. Thats right. He has horse sense that nixon. Yes, he did. He had horse sense. Bertha coombs looking at commodities with crude back to 92. Good morning. Good morning. Im trying to wrap my head of praise for nixon. Oil lower following the iran deal set to begin january 20th, easing sanctions on iran but not put iranian oil back in the market right away. We are seeing oil lower across the board. But funds have gotten a bit more bearish on oil. Last week cftc reporting funds cut net long positions on wti nymex crude by 9. 5 . Gasoline, by 12 . Demand not meeting up on those numbers. As far as nat gas, outlier and looking better, holding up above 4 as we have seen the forecast for the second half of january. Now become more bullish for nat gas with more cold weather forecast, despite the fact that we are expecting warnl temperatures on the east coast this afternoon. Back to you. Thanks so much. Here whats next on squawk on the street. Coming up, are you having trouble paddling through the market . Well, you are certainly not alone. Cramers here to help you stay afloat. Six stocks in 60 seconds. Mine was earned orbiting the moon in 1971. Afghanistan, in 2009. On the u. S. S. Saratoga in 1982. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Theres a new form of innovation taking shape. At a company thats bringing media and technology together. Next is every second of nbcuniversals coverage 0f the 2014 olympic winter games. Its connecting over one million lowincome americans to Broadband Internet at home. Its a place named one americas most veteran friendly employers. Next is information and entertainment in ways you never thought possible. Welcome to whats next. Comcastnbcuniversal. Monday morning with jim, 6 stocks in 60 seconds. Lets get it going with a sell on marriott. Jpmorgan goes buy. Price up at stratus. 3d, they dont quit. The most loved stocks in the market. So much momentum, i dont want to get in front. Ubs cuts jacobs. They go to buy. We didnt mention the Foster Wheeler acquisition, just like jacobs engineering, the business doing quite well. Jci selling some businesses. Thats my fault. Why is this important . This is a company that i said honestly, in get rich, i think can divide itself up. Selling automative electronics business. Keep Security Companies in front of you, fort net, hold the buy. People love the group. I love it, its cheap. Finish line. Dont worry about it the margins okay. They are on mad money tonight. I want to find out how good the margins are. What else . We have a company, you might have seen the ad in the second football game, h r block. The green bow tie guy in the stands. Theyve got continue together. One of the amazing stocks for 2014 because its so hard to figure out your taxes with Affordable Care act. Its incredible. I dont know if a soul and do their taxes, its too hard. Is there is a springtime hope trade around hrb the way there is around housing . There is. If you want tax credit on your to get back from the government for health care, its i dont know how to do it other than go to an outfit like h r block or accountant. I think you might miss it otherwise. Interesting. One thing we have not talked about today, jim, banks that are going to report. 3 of the big 4, jpmorgan and wells tomorrow. Review going . Whats interesting, the bank stocks in general have been down for about six straight days. Typically they come in hot and nen disappoint. Its a ver interesting thing to see whether people want higher rates, what banks need, versus possibility, the loan losses down and return of capital in 2014. This is a battleground group. I cant even tell myself, but i do which is going to win but i like the fact theyre coming in cold to the quarter as opposed to the last time they came in hot. Dove tails with the conversation last week, risen about the journal, whether trading structure is fundamentally flawed if thats ever going to to turn. I dont know. Companies are able to return capital, they will come back being favored. Its on the precipe, these stocks. See you tonight. Mad money 6 00 and 11 00 eastern time. Simon with a look at 10 00. Good morning. Well return live to detroit motor show with the head of toyota in the country. Talk about his products live on the program. Sanofi ceo how to block certain genes making certain proteins, a big buy. Latest reaction toness view with ceo of target on the major security breach. 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So you have time to focus on the things you love. Ink from chase. So you can. Welcome back to squawk on the street. Road map for the next hour, retail, target ceo speak out in an exclusiveness view with cnbc. What he knew about the data breach, when he knew it. Are retailers the primary target for cybercriminals . We saw them hit the banks last year. This year its all about retail. Find out how you can protect yourself. See of sanofi joins us for an exclusive interview on the heels of 700 million. Well talk about whats in the pipeline. Toyota unveiling a new concept car that hints at a new sports car for the automoti automotivemaker, well get details when the ceo of toyota north america joins us live interest the Detroit Auto Show. An exclusive. Ceo of target sitting down with becky quick, opening up about the data breach that now affects as many as 110 million customers. Becky joins us with more on that interview. A busy within for you, beck. Good morning. Good morning. Its been almost a month since target first disclosed information about the breach. And while target ceo says there is some information they can share at this point, there are still a lot of unanswered questions. Were in the middle of a criminal investigation, as you can appreciate. We can only share so much. But as time goes on, we are going to get down to the bottom of this. Were not going to rest until we understand what happened and how that happened. Clearly, were accountable. And were responsible. But were going to come out at the end of this a Better Company and were going to make significant changes. Thats what you do when you go through a period like this. You have to learn from it and you have to apply those learnings. And were committed to doing that. What can you share . A point of service, outside vendor, what happened . We dont know the full extent of what transpired but what we do know was there was malware installed on our point of sale registers. That much, weve established. We removed that malware so we could provide a safe and secure shopping environment. This investigation is ongoing. And its going to take some time before we understand the full extent of whats happened. Who did you think did it . I have no idea. I think i think i hope that we find out in time, and we are working closely with Law Enforcement to determine who did it, when did they do it, how did they do it. Targets top priority is trying to make sure that its customers feel safe. It is taking out ads leak this one in the new york times. Ads in the new york times, wall street journal, and other newspapers to reassure customers that they will have zero liability for any fraudulent charges racked up as a result of the breach. Critics blaming target waiting four days before telling consumers what happened, revelations from neimanmarcus, disclosures made on friday that makes targets disclosure look speedy by comparison. A discussion i read from the journal who is liable between the retailers and banks. Banks no longer willing to say well foot the bill for this. Its a huge point of contention. We asked the ceo about that. He said its something negotiated between the banks and target, depends on the different Credit Card Companies which all have different policies for what theyll cover and how. An interesting interview. Thank you very much. Back to the markets. In the red. The eighth trading session of the year. The dow down about 0. 8 . Analysis on what this tells us about the year ahead. The chief Investment Officer with frank asset management. Good morning. Good morning. So, john, when you see the market here stalled slightly declining after the phenomenal 2 1 2 year rally, many people questioning if were about to change direction. What would you say to them . Well, we came a long way very fast last year. And of course, weve got into the new year now and theres a lot of portfolio rebalancing going on. Obviously bonds did poorly, equities did fantastic. Its difficult to read a lot into the first couple weeks of the year. People are now waiting for the start of earnings season. Well know more after we get into earnings season. Im not overly concerned about the lackluster start to the year. Frankly, i thought we might be down even more so far in 2014. On friday, goldman put ow a note where they said that we were fairly lofty valuations, as things stand at the moment. You were unlikely to get a further expansion, youd have to have profits growth. Today the global strategists at goldman have issued another note in which they say down grading u. S. Equities to underweight for the next three months and that they believe theres a possibility of a 10 correction and that that would create a more attractive entry point for investors later in the year. What would you say to those goldman assessments . I think valuations are on the upper enof the spectrum. Keep in mind where we are. Think of Money Market Funds, theyre not alternatives for equity but youre getting one or two basis points on a Money Market Fund today. Previous market highs in 2000 and 2007, you were getting 5 , 500 basis points. You have to weigh that into the equation as well. Of course where we are in the bond market john, you know as well as i do, people in the equity market for that reason, the question is do they book profits here or stay in for fear theyre going to miss out on a further rally. Thats the conversation most people will be having. Absolutely. The folks who have a longterm time horizon should stick with. Think where else you can put your money. Bonds have not rewarded folks and yields are not strong. Commodities good whacked last year. Stocks look like a very attractive place to be, especially when dividend yields are in 2 , 3 range. Equities are a place to be. Joined by Mike Santolli a senior columnist with yahoo finance. What are you hearing . What are you writing . Valuation is no longer the reason to be bullish on the market right here. I do kind of agree with the general goldman take that you know, valuations are above expectation or history and i think one of the key points, the median stock, is at a higher valuation than index. Wait out is a second wind to Earnings Growth especially among the cyclical sector of the economy. I think theres a chance to mitigate the high valuation with an uptick in the Earnings Growth case which were set up for a positive surprise here, but that being said, i dont think stocks are cheap is the reason that youre interested in buying at these levels right now. What makes you think this is earnings this their time, michael . Mainly that expectations have been kind of beaten down and also the Global Growth exposed segments of the market last year did actually sort of sit out the last phase of the rally. I do think thats where you might have the source of a little upside in the next couple of quarters. I dont know if its going to blow anybodys you know doors off with the pace of growth in the first quarter. But i think that when you fixate on exactly what sectors can perform reasonably well, well have a handoff from domestic consumer based stuff to the more globally exposed areas. Well leave it there for the moment. Thank you for kicking your week off for us. From santoli to sanofi, expanding its role in research for genetic diseases with 700 million deal this morning. The ceo of sanofi will join us for an exclusive after the break. [ male announcer ] eeny, meeny, miny, go. More adventures await in the new sevenpassenger lexus gx. Lease the 2014 gx 460 for 499 a month for 27 months. See your lexus dealer. Welcome back to squawk on the street. The wild right for Intercept Pharmaceuticals continues. Stock down 15 , 17 after its immediate orric rise last week. Could be profit taking or that late friday news came out that its experimental Liver Disease drug experienced more abnormal cholesterol levels than those taking a placebo. The stock had rose 550 last week. Now off the session lows here but, still decent sized moves to the downside, david, for those intercept pharmaceutical chairs. Incredible, dom. Truly extraordinary the moves in that stock. Certainly the up move, as well. Talk about another stock actually related to sanofi which announced 700 Million Investment deal with alnylam. Thats a company that its genzyme unit invested in 700 million in stock. Also having a very positive impact on those shares which are up over 50 . The investment made at 80 bucks a share. Well continue the companys focus on genetic diseases, joining in on an exclusive interview, sanofis ceo, chris viehbacher. Nice to have you with us. Start on the deal this morning. You pay 700 million. In an equity up vestment at 80 bucks a share, why . Well, you know a number of years ago, we decided to redefine innovation model. We moved away from the campus in the forest and moved to implanting research in major ecosystems. And the acquisition of genzyme did that for us in the boston cambridge area. Alnylam is across the street from genzyme. So when we acquired genzyme, a clear commitment to Rare Diseases. And this model gives us access to a portfolio of new treatments for Rare Diseases. But its also, i think, different model in the sense that you know, alnylam also announced an acquisition of patents from a Company Called cerna that merck acquired. The technology always hasnt done that well. So this is an opportunity for us to participate as a partner, shareholder, but to also leave alnylam not only as an Autonomous Company but grow from being research and Development Company to fullyfledged, integrated commercial company. Thats the logic behind that. Is that a new strategy in the sense of, many offo our viewers recall the large acquisition of genzyme. Are those deals not going to happen in the future, as opposed to replaced with the like of this transaction or your ownership in regeneron, for example. It was the model for this transaction. Soed, sano today, sanofi has one of the top five pipelines in the industry today. A large coming from regenero. Theres a positive relationship between the r d expertise in regeneron and the global scale and commercial of sanofi. We dont just invest as a passive investor. But equally we want we dont want to particularize, as the ceo of regeneron likes to say we dont want to sanofize anybody either. Theres an opportunity for both to contribute what they can do best and grow businesses. But you know, often we want to control in this industry and own and the people who are inside these companies, really driving the science, are not really happy with that arrangement and tend to leave. This is a way of sanofi participating in very cuttingedge science. Its right in the sweet spot of where genzyme is. Genzyme is the leading Rare Disease Company worldwide. I think both of our businesses can grow out of this relationship. I have two questions for you first is the degree to which you feel personal pressure to be seen to be doing something because of course genzymes new multiple sclerosis drug rejected by u. S. Authorities last month. The second question, whether you can flesh out what new technology is in the acquisition today, the idea that you can provent genes from being designated proteins. So, i mean, if you look at genzyme, its our second biggest growth driver after diabetes. We have been able to successfully address the manufacturing issues and the Rare Diseases franchises growing at strong double digits within genzyme. Multiple sclerosis franchise is doing extremely well. And obagio has approved by over 30 countries in the world. The fda is an outlier on this. Look at multiple sclerosis mark, its a rare mark where theres more patients, for example in europe than in the United States. So genzyme is going to continue to do well. Were clearly disappointed with the decision, and we intend to appeal because i think this is an important medicine that needs to be accessible to patients. Even without the United States, genzyme is on a strong growth track. And then, this partnership with alnylam really expands our horizon in Rare Diseases. There are 7,000 Rare Diseases that we cant treat more than 300. So this is part of our underlying commitment. Now to the science, this is where the science is very interesting. You know, disease is often created by whether a protein is created or not. And in Rare Diseases you often have welldefined genetic targets. The relationship between the gene and the protein is better defined. So, this r a interference, which can turn the gene on and off, and stop production of the bad proteins, is actually an ideal place for this technology to be used. Alnylam alnylam is the First Company to figure out how to deliver these r a interference therapeutic. An exciting technology. I guess the question is what sort of scale do you get here . I understand theres work for hemophiliacs which is a huge group. Is it always a small number of people and an expensive drug, or does it have potential to, for example, cure alzheimers . Well, were only interested in the rare disease piece. I mean, r a interference could affect a number of different diseases. But you know, nochb other diseases that relationship between genes and proteins is not as clear. So, this is why you know were developing that technology through Rare Diseases. Thats our area of interest. Alnylam has other areas of therapeutic interest. For us, Rare Diseases talking about handfuls of patients around the world and some countries, you know, most of genzymes 2 billion euro plus business is done with less than 10,000 patients around the world. Its expensive to produce the drugs. Its expensive to develop these drugs. Youll have a model of relatively individual high cost. But when you look at Overall Health care system, most governments are spending far less on Rare Diseases than they are on actually diseases that are caused that could be prevented if people actually looked better, took better care of themselves. Before we let you go, some say youre in the top five in terms of pipeline and wonder at that comment. What gives you confidence that you do through the various deals and of course through what you own completely, have a pipeline that is going to produce the kinds of breakthroughs that weve seen in the past, many of those which of course have fallen off patent . Yeah, i think its most underappreciated part of sanofi today. Take a pcs, a big class. Aisle 6 developing rheumatoid arthritis. Il4, exclusive in the area. Weve demonstrated outstanding results at atopic dermatitis, severe asthma, another 14 indications in autoimmune diseases. We have a dengi vaccine. Most think its in poor countries. Its a big issue in places like singapore, affects over 350 million every year. A next generation insulin product with u300. 100 of Late Stage Development is in biologics. Now a lot of these are cutting edge science. You cant look up and see wheres the market for these because the drugs are actually pretty innovative. So and we need to educate investors about opportunities im confident in this. The partnership in regeneron provided three medicine mz i think the partnership with alnylam demonstrates the collaboration model weve built in r d. Appreciate your time. Thanks for joining us this morning. Thank you. Chris viehbacher, ceo of sanofi. Next on the program, apples new commercial has some people asking, why so serious . Gone are the days of the upbeat music and dancing silhouettes. Well talk about the new trend in apple advertising says about the company with buzzfeed, after the quick break. Conversation abr mortgage didnt start here. It began on her vacation in europe. Someone stole her identity and opened some credit cards in her name. Checking her experian Credit Report and score allowed her to better address the issue. And move right in. Experian. A body at rest tends to stay at rest. While a body in motion tends to stay in motion. Staying active can actually ease arthritis symptoms. But if you have arthritis, staying active can be difficult. 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Excerpts of Robin Williams from dead Poets Society and quotes walt whitman. Why so serious . Jon steinberg, a cnbc contributor joins us at post 9. Good morning. Why so serious. Everybody making fun of it on twitter, it was cheesy, using dead Poets Society. Apple is a smart company. A report out last week, 2009, 8 enterprise spin. It will be 11 in a few years. Massive growth from 1 five years ago, right . So emotional. How is this aimed at companies. Look at what people are doing. Professional hockey team, professional photographer on top of a wind turbine, professional photographer on a mountain, right . Creating a story about professionals that we want to aspire to, right . None of us are going to be on mountains or piloting helicopters but why would apple want to show a commercial of somebody working on an ipad at a desk . Im interested you frame it like that. I thought it was about human ambition and adults trying to expand their own lives and actually steering clear of any Value Proposition. Right. Which has dominated the market for so long. This is more about branding and saying, we are the high margin player in the market. We dont need to worry about whether its 159. Simon, every one of the examples, even the deejay, someone doing something quasi profession. Its the creative professionalism but introduce the ipad pro this year. A report out that the supply chain shows theyre working on 12 to 13 inch model. They could have shown people dancing around with ear buds. Or reading a book but its people doing creative professionalism. Its accompanied by a web page called your verse. Right. Referring to the theme that Robin Williams is reading about. Where does it fit in the narrative of the think different ads. Think different is a good example. Think different was the most creative story about education, right . They didnt say use our tools to do your school work, great for kids to do homework. Kids aspiring to the great inventors of our time. This is exactly the same thing. It is deja vu all over again. We arent seeing candy colored imaths spinning around. Byod, bring your own device to work, right . That number i cited, the 8 going to 11 , it doesnt include iphones, right. So theyre trying to get people to bring these devices to the workplace to do professionalism and aspire to being the most creative. Weve seen that trend for some time. Yes. Our guests on cnbc many of them chief executives bringing ipads with them for years. Right. Is that i mean is it accelerating at a greater extent . Its not just the c suite. Fortune 500 companies telling employees part of their job to bring their own device to work. Thats what i was going to say. Not only do you get a pay rise, youve got supply your own hardware. They offer a credit to buy your device. Some dont from what youre saying. Some people have such archaic hardware they prefer to bring in their own ipad instead of using terrible equipment in that they have. I want everything to be in the cloud. I talked to crimer about the cloudbased applications. When employees are laying on the couch on saturday i want them to access everything that they want easily from the device. I dont want to make it hard if they want to look something up or fire off an email with a little piece of datdata. This plays into that. I think of the tim cook quote, were not in the junk business. Theres a junk business but they dont want to play in that. Youre arguing this feeds into that. Thinking about being here on set with you, you dont have blackberries, there are iphones sitting on the desk now and blackberry is saying that our big push is more keyboards, right . Do you want to if youre a professional looking for tools to be productive, do you want to be associated with keyboards or with the guy on the mountaintop to do the profession . Its about brand association. Another reason why pc sales were down last year. The 12inch ipad can be a replacement. I think its a revolutionary. Apple will do a tv, i big enterprise decision to consumer. See if they hold 540. We are going straight ahead to detroit. Toyota stocks struggling over last few months, down almost 10 . What does the automotivemaker have in its pipeline to get investors on board . Well talk to the ceo of toyota north america when he joins us live shortly. For the year. Hi. Sorry. Just want to say, i bundled home and auto with state farm, saved 760 bucks. Love this guy. So sorry. Okay, does it bother anybody else that the mime is talking . Frrreeeeaky [ male announcer ] savings worth talking about. State farm. 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When youre ready to buy a car, save time, save money, and never overpay. Visit truecar. Com one hour into trade, some of the stories were talking about, 7 30 on west coast. Shares of spiritsmaker beam soaring, up 24 h . Being acquired by suntory of japan for 83. 50. Merck biggest gainer, up 4 . A review by the fard says the experimental treatment to prevent blood clots should be pursued. And macys among the stocks hitting new highs, up 31 in three months. Toyota trying to break out of the functional conservative car mole by invaulti vaulvau unveil car. Phil lebeau with a cnbc first on cnbc interview. Good morning. Thank you very much. Joined by jim lenz, head of toyota north america and ft1. Well show you pictures. Wow an exciting car. We went to our designers who are passionate about sports cars and said, clean sheet of paper, give us what you think the ultimate sports car is. And ft1 is what they came up wirth. The core of what toyota talked about, weve got to get more passionate . Its all about his definition of heartpounding, passionate excitement and thats what it represents. Behind us, you have the fcv, fuel cell vehicle. Yes. When do we start to see fuel cells takeoff in but for the masses its available. I think late 2014 from some manufacturers. We begin our sales in 2015. So we think its the real deal. Its going to depend a lot of infrastructure. States like california that have a plan for infrastructure, i think youll see strong acceptance. This gets to what we were talking about before we went on air, fuel prices. You have a different view than everybody else. You think were in a range where its going to plateau, right . I think thats what were seeing. Interesting to see what happens this spring. In the spring we see increase in fuel prices. But today, fuel prices are hovering around 3, 3. 20 a gallon. Its going to make the acceptance of some alternative fuel vehicles more difficult if we see a longterm, stable price of fuel. You think we see that flattening out for a while . I think we do. Look at how much more drilling, advent of oil shale. Theres a lot more supply of oil than we thought. Brings up the question, does that limit growth in sales of the preous and other vehicles . Im not sure. If you look at last year, low fuel prices we sold 345,000 hybrid vehicles, the most weve ever sold. Its become a conventional mainstream type of technology. So i dont think were going to see that happening. Simon has a question for you back in the studio. Good morning. Theres an interesting article in the Financial Times that draws attention to the fact, as an industry, youre investing all of you at a record level. It says, google is snapping at your heels and you want to be seen as innovators and not manufacturers. So it brings me to two questions. Is there enough profit out there for you all to recoup this massive cost of r d, and my second question would be, in the future, do you become more like Consumer Electronics plays . In other words, if you launch a car that done have the musthave factor, do you end up having massive writeoffs because it simply doesnt sell and everybody goes elsewhere . You know, i picked up half of your question. But you know, we see the industry growing now based on the strength of the economy overall. And not necessarily based on the pentup demand weve seen in the past. R d is going to continue into all of the alternative fuel type vehicles. So we see not only hybrid, fuel cells, and possibly other technologies into the future, that are going to be the mainstay. But to get to simons point, there too much capacity . Weve got everybody building plants around the world. Too much capacity . I dont think theres too much capacity at all. If you look at north america as an example, we will see 17 million markets again. If you look at the way most are getting to that, theyre running three shifts in some cases in their plants. So i think there is room for more capacity. I cant tell you about china or europe. But in the u. S. , i dont think weve reach the top of capacity yet. Interesting perspectives, guys, when it comes to not only capacity but gasoline prices. People would be happy to hear he thinks theyll flatten out for a while. Phil lebeau in detroit. When we return, a pairing fit for the 21st century nbc news teaming up with video start upnow this news. Details from one of the people behind the deal. After the break. Stacys mom has got it goin on stacys mom has got it goin on stacys mom has got it goin on [ male announcer ] the beautifully practical and practically beautiful cadillac srx. Lease this 2014 cadillac srx for around 319 a month with premuim Care Maintenance included. Afghanistan, in 2009. On the u. S. S. 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Start your Business Today with legalzoom. Nbc universal news group announcing minority investment with now this news, a start uplooking to reinvent video journalism for digital audiences. The two companies coproduce original short form news videos distributed across mobile and social platforms. Now its a startup and portfolio company, the managing director at lara ventures joins us at post 9. Good morning. Good to be here. A Tipping Point of sorts. I think so. I think teaming up with Nbc Universal news group with all of the Great Television brands that the group has is fantastic. And hopefully it will be great for nbc as well. Youre not new, youve done 10,000 of these essentially, these news updates. Its short form. Produce 50 a day. 10,000 sounds right. Short form, we really mean short form, 6, 10, 15 seconds. To go on new Distribution Networks such as instagram, vine, snapchat, thats where the growth is. News is a growth business. And because of technology and all of the growth, a lot of the growth, is on the new platforms. Give us a sense of what the growth rates are and what viewer ship is like, as best you can tell. Instagram over 150 million users. They are 400 million snaps short videos that are being sent every day on snapchat. These numbers keep growing at tremendous rate. Eric, this is video, this isnt text. Do you see video as future of communication here . If you look at how people want to get their information, its increasingly on the mobile device. And the best way to deliver content of mobile device through video. Advertisers want that opportunity as well . Advisers are, you know, beating down the door because they want to learn, they want to reach. This is a desirable audience. Where is the sweet spot in term of duration . You mentioned 6 or 10 seconds. I know a lot of viewership is younger, so to speak. Seems hard to imagine people can get any sense of anything from something they watch for 6 to 10 seconds. Now this news is doing this over a year now. Weve learned art of producing that kind of content. Probably not exactly there yet, but we have evolved. We can tell really serious news stories in this short form. We spent our lives questioning Tech Companies whether they monetize what theyre doing and it seems right and proper we ask that of our own chairwoman. She says we cant be pressured with having inhouse and platforms, can she monetize outside the nbc news website or nbc the network . We believe so. This is taking the content to where people want to watch it. This is not building a destination site. This is putting content in a mobile world, in a social world. How do you monetize . Advertisers want to sponsor content, create their content. Created content is different what nbc news would do. Thats in association with advertiser, isnt it . Its sponsored content. The content is clearly labeled that its sponsored. But it goes in the flow of the rest of the content which is all journalistically produced content. Are the cpms attractive as others would have us believe . Very attractive. By a function of how many versus different kinds . Its by a function of maybe ten at the moment. Now, as more and more content is produced, that will probably come down but its very attractive. How dependent are ow on the distribution platforms . Could they i know i assume theyre common carriers but what is that relationship like between the likes of what were doing now and Instagram Facebook or twitter or any other platform. The relationship has been excellent. You know weve been with our others like huffington post, buzzfe buzzfeed, of course they own instagram. They recognize content is king. Theyre always looking for high quality, wellproduced content, which is what were doing, what were doing with nbc. Congratulations. Do we have to call him boss now . I dont know. No. Partner. Yes, partner. There you go. Partnerships work out great. Dont you worry. Eric, thank you. Thank you. Of now this news and lehr. Scripps networks, slammed on discussions that it and Discovery Communications broken down. Wall street journal is saying, talks of a potential merger didnt make it past the exploratory stage. For Discovery Communications, you can see, just off about. 9 here or sorry,. 1 . Check out the shares both moving. Back over to you. Thank you. Next on the show, if banks were last years targets for cybercriminals, are we seeing that retailers will be the targets this year. Well talk about who else could get hit and how you can protect yourself when squawk on the street comes right back. Tdd 18003452550 trading inspires your life. Tdd 18003452550 life inspires your trading. Tdd 18003452550 where others see fads. Tdd 18003452550. You see opportunities. Tdd 18003452550 at schwab, were here to help tdd 18003452550 turn inspiration into action. 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Its connecting over one million lowincome americans to Broadband Internet at home. Its a place named one americas most veteran friendly employers. Next is information and entertainment in ways you never thought possible. Welcome to whats next. Comcastnbcuniversal. I just knew from the getgo that i was. Flat out getting a good deal. When youre ready to buy a car, save time, save money, and never overpay. Visit truecar. Com welcome back to squawk on the street. Looking for the next hot biotech stock keeping an eye on Clovis Oncology, after citi Group Analyst appeared on cnbcs fast money and said clovis could be the next Intercept Pharmaceuticals. Intercept scored 500 last week after a successful test for liver drug. Both companies slated to report at jpmorgans Conference Today and tomorrow. Cnbcs Brian Sullivan is live at the Conference Today in San Francisco with interviews throughout the day. Well stay tuned for headlines out of that. Back over to you. Thank you. In the meantime, lets note that the market really is going nowhere. Its been i think disappointing start to the year. Our eighth trading session. Were flat to negative, down 0. 8 on the dow, after of course we surged for 2 1 2 years and thats got a lot of people scratch their heads. Today, typically you say the big money would return. This is when most people are back from holiday. Everybodys fully up and staffed. Well see where they take it from here. Interesting. Dom talking about health care, and theres that jpmorgan conference. But its been pointed out already this morning, health care the second best performing group in the s p last year, so far this year it is up the most. Up 2. 4 . Not saying much. But simons point what Everything Else has done, doesnt take much to take leadership in the market now. No. Its interesting, we spoke to sanofi earlier, that investment in that small Biotechnology Company sparks 50 rise. Youve seen a number of dealrelated data points that have helped greatly in that sector. M a volume, year to date, in the u. S. 55 billion, the best at this stage of the year. The best since 2000 which was of course aol time warner. That was a big year. That was a very big year. Well see. That will keep that pace. Nice start. In the meantime, target and neimanmarcus the latest victims of cybersecurity. In an interview with cnbc with squawks becky quick, targets ceo says he was devastated by the attack. Here what happens he had to say about customer liability. As zero liable, zero liability, which means that target is paying for any fraudulent, any possible fraudulent activity on anybodys credit card and providing free credit monitoring service. So the guest has no liability whatsoever. Next guest says more retailers can expect to be the target of cyberattacks this year. David kennedy, an ethical hacker who consults for fortune 10s and 100s major retailers. Good morning. What is an ethical hacker . You go in, find floors and say youve got this floor sorted out we simulate everything that happened to target. As good guys we find out vulnerabilities, hack systems, try to take money out, simulated. We simulate what bad guys do to good guys protect against it. You told a researcher normals sort of attack at target back to eastern europe, but it is so sophisticated you believe it originates from here in this country . Well, what were seeing if you look at the Different Companies being targeted, theres another three smaller retailers now coming out that they have been breached. It looks very sophisticated, very planned and orchestrated. And they all have the same type of similarities from target to Neiman Marcus to all the other ones out there. So, yes, it looks very sophisticated. This is not something we would typically see from organized crime in Eastern European countries. This really seems to be more focused here central in the United States. You know, there was some criticism of target taking, i think, it was four days to come out and go public on what had happened. Neiman marcus doesnt seem to be saying very much at the moment. From a technical perspective, what do you read into that and this idea that other retailers, unnamed retailers, may also have been the subject of attack but still have yet to come forward . From Neiman Marcus, looks like they knew it several weeks before the closing of december. And they didnt report until january. The reasoning was they were still gaining information about what actually occurred. Target took the exact opposite which is giving as much information as possible. We keep seeing the number continues to grow and other systems appear to be compromised. What i would read into this is either they didnt want to impact their q4 sales or theyre really having a tough time and struggling with identifying how this breach actually occurred and how big it actually was. They havent released any numbers, how extensive this actual breach was. Its pretty alarming in the Security Industry not seeing this information yet. David, at the outset you indicated theres going to be more of this rather than fewer perhaps in the financials area. I mean breaches and attacks, why is that . Why have retailers suddenly become more of a focus . Few you look at a lot of theyve moved to env, the you insert your pin and then transaction. We havent moved that far in the United States. Its estimated 2020 before we get to this type of technology. Right now the United States is extremely vulnerable to these si type of attacks where they can look at the actual data itself and actually grab that. Its a huge opportunity for attackers. Attackers go where the moneys at. And right now the United States happens to be one of the largest, you know, credit card providers in the entire world. So the attacks are going to continue to be here. And Retail Industry is way behind a lot of other industries out there. They view their point of sales is isolated in a way. David, what do i do today to protect myself . Well, for these specific breaches right now, you know, my best recommendation is just cancel your credit card. Thats the easiest way, you get a new card issued in a couple days, dont worry about monitoring your transactions or credit cards. But the problem right now is were even seeing phishing attacks where people are sending scams and emails originating from target or other companies being targeted and saying click here to see if youve been compromised and they hack your computer. Dont click on things that you dont know come from the Actual Company themselves and also cancel your credit card. You want me to cancel all my credit cards today . The ones that you used at Neiman Marcus and target as well, yes. Those are the only two id be concerned with at the moment. But monitor your credit card. Thats important. Theres also something called Google Wallet which you can get a credit card that comes from google and you can only authorize specific transactions you want. Its a lot more secure. And you can incorporate all your credit cards into it as well. David, thank you for your advice. David kennedy joining us there the ceo of trusted sec. Thank you so much. When we come back, facebo facebooks new investment. More on that after the break. I need proof of insurance. Thats my geico Digital Insurance id card gots all my pertinents on it and such. Works for me. Turn to the camera. Ah, actually i think my eyes might ha. Next Digital Insurance id cards. Just a tap away on the geico app. Could save you fifteen percent or more on car insurance. Everybody knows that. Well, did you know that when a tree falls in the forest and no ones around, it does make a sound . Ohhh. Ugh. Geico. Little help here. Became big business overnight . Like, really big. Then expanded . Or their new product tanked . Or not . What if they embrace new technology instead . Imagine a companys future with the future of trading. Company profile. A Research Tool on thinkorswim. From td ameritrade. Amazon started in a garage. Hewlett packard, and disney both started in garages. Mattel started in a garage. The ramones started in a garage. My point . You never know what kind of greatness can come out of an american garage. Introducing the 2014 motor trend car of the year. The all new cadillac cts. Aint garages great . Is your tv powered by coal . Natural gas . Nuclear . Or renewables like solar. And wind . Lets find out. This is where americas electricity comes from. A diversity of Energy Sources helps ensure the electricity we need is reliable. Icas electricity comes from. Take the energy quiz. Energy lives here. Welcome back to squawk on the street. Traders and investors looking for the next hot biostock keeping an eye on clovis. It was up much more after hours on friday. Remember citi Group Analyst appeared on fast money, remember that stock has been up and down a lot over the course of the past week. Keep an eye again on those Clovis Oncology shares. Like deja vu all over again. Thank you so much, dom. By the way, take note that facebook is buying branch, the new yorkbased messaging service backed by evan williams. The ceo of branch announced the deal via facebook of course this morning. He didnt disclose a purchase price, but according to to recode a person familiar with the deal put it around 15 million. We want to note that cnbc has a content sharing agreement with recode interesting for both williams and stone, on a day where twitter is up more than 3 . Guys, goldman after all those sell ratings that we saw over the last couple of weeks, i think four at least, goldman does reiterate their buy, takes their price target to 65, raises their ebitda. Thats twitter youre talking about . Yes. Science and Life Technology overall, even old tech, Hewlett Packard and twitter up. Weve also as you take a look at twitter of course weve also talked this morning it is interesting, i think, that the nasdaq is positive. Have you read this cost note out from goldman. I have in terms of the multiple and arguing 17 to 18 is really where we are and not necessarily sustainable. The few times its happened has gotten us into trouble. Thats a good friday note. The note today is saying you should they were underweight on a Global Portfolio on u. S. Equities and feared a 10 correction and a better buying opportunity down the line. Well see if that gets any action on traders minds. Seemed to have been at the open but now i would call more of a mixed market though plenty of names down. See you in a bit. Well talk europe in a few. If youre just joining us, heres what you missed earlier on. Welcome to squawk on the street, heres whats happened so far. We are not going to rest until we understand what happened and how that happened. Clearly were accountable. And were responsible. But were going to come out at the end of this a Better Company. And were going to make significant changes. Were going in to win the segment. Were going to make sure we understand the customer, performance, quality and knock out styling. Are you better at doing that, you think . I think if you look at what we just the awards we just received i think that starts to tell the story. Maybe in toy buying customers literally going to someone who hasnt been hacked, it hasnt happened yet, then im not going to pay as much attention. Targets working, targets going higher, not lower. Im really pleased. Will you stay just this year or beyond this year . We havent changed our guidance and that is ill stay through at least 2014. At least . Thats the guidance. Well know more after we get into earnings season. Im not overly concerned about the lackluster start to the year. Frankly i thought we might be down a little more so far in 2014. So this is an opportunity for us to participate as a partner, as a shareholder, but to also leave not only as an Autonomous Company but help it to a fully fledged integrated commercial company. Good monday morning. Were live here at post nine at the new york stock exchange. The transports set a new record today as crude has come down. Shares of lululemon taking a big hit after cutting earnings of revenue guidance for the Current Quarter. Traffic and sales trends are seeing a huge deceleration since the beginning of january. Meantime, shares of wendys rallying this morning. The restaurant chain said preliminary Fourth Quarter profit came in above expectations thanks to strong growth and same store sales. Our road map for this morning goes like this, is this the end of the mall as we know it . According to billionaire retail moeg mogul, well find out why in a moment. Plus golds bull run is over. Thats the head of commodities at Goldman Sachs. Hell tell us why in a few moments. The image of target brand took a major hit following the massive data breach next month. What canned retailer do to gain bab the Publics Trust . Well talk to the former ceo of costco later this hour. Do you have a degree in Computer Engineering . If not, thats okay because building your own computer is now easier than ever. Were going to talk to one company trying to make coding and computing easy for everyone all for about 100. But first up, lets get to Steve Liesman following a new report from the new york fed. Good morning. New york fed releasing right now results of a new National Survey on Consumer Attitude toward finance that it will publish monthly. The survey of 1200 individuals over the internet looks at expectations on everything from inflation to home prices to wages and credit. We want to give you some taste of whats in this survey. Right now what you can see is we have the current month, the last month next to it in green and the sixmonth average. You can see there Inflation Expectations over the oneyear very well contained, gas up a little bit compared to last month. And then you can see the perennial medical and college, always seen as being higher. The Inflation Expectations in that regard are higher. But not a lot of change at all from either the prior month or the sixmonth attitude. Theyre also asking about income and spending. Income expectations down a little bit at 2 compared to 2. 3. Spending expectations high at 4. 7 . The jobs outlook also contained in this survey. The chance of losing a job in the next 12 months just 16. 8 . And finding a job, 45. 9 . Again, were just giving you this an idea of what to expect in the months ahead as we report this. Credit being harder to get, down a little bit. Delinquency or chance of not paying a bill in the next 12 months also down a little bit. The possibility of higher savings account rates also up a little bit. Well have to monitor these releases. See if it gives any clues to other sort of more market moving data say the Conference Board of university of michigan but also if they influence into fed policy. Carl, you know, it takes a long time for the market to monitor this stuff, as much as five years before they even start to make a trade on it, carl. And still a lot of data on the way this week, steve, as we get through some inflation and jolts on friday too. And retail sales as well. Thanks, steve. Steve liesman back at hq. Target chairman and ceo talked to becky quick this morning. Heres what he had to say. I was devastated. I mean, how could this happen to target . It was really a moving moment for me because were all about the guests, were all about the trust and relationship. This is what weve built the franchise on. And were joined this morning exclusively by the founder and ceo of one of the largest privately held Real Estate Companies in the country whose Properties Include the highest grossing Retail Centers in the world. Rick carusso joins us this morning at post 9 having given a keynote yesterday. Good to have you. Good morning. Thanks for having me. Your point is the traditional mall is basically on its way out. But retail is timeless. How do those two things square . Because i dont think the traditional indoor mall mimics the rhythm of life for how people live their life. I think retail provides an experience that people are going to continue to want to have. Onlines going to be a force. Brick and mortars going to be a force if done right. But if the indoor mall isnt reinvented to create that experience and to be compelling for the consumer, theres a lot of choices out there. What makes it compelling. You see that decline today. Heres an interesting statistic. Since 2006 there has not been an indoor mall built in the United States. So if you were following any company that you guys follow here on this show that wasnt building a product for the last seven or eight years, you would say probably the consumer doesnt want the product anymore, right . What makes the malcolm peling over the next 10 years . Great architecture, great retailers. Retailers have to be more merchants and storekeepers, provide an experience when you walk into that store. Listen, the most basic starbucks does it. Its warm, its inviting, it smells good. People surf the internet, theyre there all day. They dont ask you to leave. They welcome you into their space. Great retailers. Nordstrom does a great job. Theres many of them that do a great job, provide that great compelling experience when you walk in. Great service. Good products value. Costco does it. Youre going to have jim on the show later. Yep. That makes the difference with retail. Retail brick and mortar has a great future. Does it matter what space their . Does apparel, do they have a longer road to get there than say electronics or toys or some other space . I really dont think so, carl. Because i think if you mimic the rhythm of life, if you give people a reason to come, people are always going to have a multichannel, okay. We were talking about it earlier. Sears always had brick and mortar and always had a catalog. Youre always going to have multichannels. Online is going to have to create a great experience because thats a credit market also. So i think, you know, apple did a heck of a job building their stores. Thats why their products, i think, again are so compelling to people. Because to shop that store is so interesting. We led the conversation with the sound out of the target ceo. What about the customer says ive had it, im not going to put my credit at risk, my bank account at risk. I think everybody has to take it seriously. I think target has done a great job in how theyve dealt with it. Youve got to be very transparent. I think the consumer is a little bit sort of shocked now. But its going to come back. Its a shortterm problem that needs a longterm solution. And Customer Confidence has to come back that their data is going to be kept confidential. We try to take stock of the holiday. We know the calendar was weird. We know it was promotional. Looks like thats now carrying over into the new year. Why is traffic so challenging . The mall dynamics you explained aside. Well, listen, i think the consumer is more confident. I think theres still some cautiousness on their part. Theres no doubt about it. But i can only talk about my properties. We had double digit growth on our properties. The nordstroms stores arent our properties, were at the top of their chain in terms of growth. Why is that when retailers across the country are maybe sort of flat or down a bit and our properties are up double digits . I think it goes to what im saying that if you create the environment and the experience, people will come. I think viewers understand that. I think viewers also say that sounds expensive to do that. Thats going to take some money. Thats going to take some cap x. It will. It will. But its a good investment and you get a return on your investment. Why wouldnt you do it . Anybody selling a commodity and thats the business im in. Whatever you buy in my property, you can buy in a thousand other places around me. Why do people bypass those other shopping experiences and shop with us . Its because weve made that investment to embrace the consumer, give them great service, put them in a wonderful atmosphere. And when people feel good, they spend more money. Finally, a question on rents. Yeah. Vacancies, cost, where are we headed in 2014, do you think . I think rents are going to go up. I think retailers i know for a fact are expanding. Good properties and good retailers see an opportunity in this market to expand and capture that customer. I think were going to see some good growth in 2014. We could spend the whole hour talking to you, rick, but well move on. Thank you for coming. Appreciate it. Rick caruso, the founder and ceo of carusa affiliated. Lets check out aarons which operates in the rent to own. Fourth Quarter Results will not match october down beat forecast. To make matters worst it also forecast weak earnings in 2014 blaming a difficult economic environment. Remember, these guys, carl, service that lower end shopper. So perhaps some interesting signs about the health of that market. Back over to you. Thank you very much. The incoming ceo of general motors, mary barre spoke to cnbc at the Detroit Auto Show this morning talking about just how far the industry has come since the recession. Take a listen. Since we came out of the 0809 timeframe, weve seen steady growth. Hopefully well continue to see that. There will be some ups and downs, but were looking to continue to build. Again, with great products were looking to take advantage of that as well. In the last year and this year together we have 32 new launches coming out. So, again, its going to be about the product and how we get those into the marketplace. So gm certainly seems confident about the future, but what about the rest of the Auto Industry . Well have more with the ceo of mercedes, steve cannon, in just a moment. [ male announcer ] heres a question for you is your tv powered by coal . Natural gas . Nuclear . Or renewables like solar. And wind . Lets find out. This is where americas electricity comes from. A diversity of Energy Sources helps ensure the electricity we need is reliable. Take the energy quiz. Energy lives here. Ask me what its like to get your best nights sleep takeevery night. Quiz. [announcer] why not talk to someone whos sleeping on the most highly recommended bed in america . Ask me about my tempurpedic. Ask me how fast i fall asleep. Ask me about staying asleep. [announcer] tempurpedic owners are more satisfied than owners of any traditional mattress brand. Tempurpedic. The most highly recommended bed in america. Now sleep cooler with extra cooling comfort on our bestselling tempurbreeze beds. Visit tempurpedic. Com to learn more, and find a retailer near you. Been talking about health care all day long and looks like we will for a while. One of the big winners on the s p today. Dom has more at hq. Health care was the second best performing group in the s p 500 last year up nearly 40 . So far this year theyre the best performing sector up more than 2 . Now, leading the way higher this morning check out shares of merck, also st. Judes medical Fourth Quarter earnings came in better than expected. That big strong momentum trade from last year for these health care names, biotech continues for some of the big ones, health care very much in focus today. Back to you guys. Mercedes unveiling all new midsize cclass sedan. Phil lebeau joins us with another exclusive interview from the north American International auto show. Hey, phil. Thank you very much, carl. Joined by steve cannon, head of mercedes usa. We used to call the cclass the baby benz. But now we have the cla. So when you look at the cclass, where does it position in the market . Well, our baby is all grown up. This is probably our most accomplished, most intelligent execution, most beautiful execution in the cclass. The cla is that now entry point. Its bringing new buyers. We Just Launched it a few months ago. Eight in ten of the people that bought the cla are brand new to the Mercedes Benz franchise. Theyre going to feed our overall brand for years to come. And were going to give them a place to migrate, and thats the cclass. Still our volume product here in the United States. We sold more than 75,000 this past year. Is that luxury buyer, the new eight in ten whos coming into mercedes for the first time, are they coming from other Luxury Brands or from the mass market . And in essence are we seeing a growing luxury market overall . Were definitely seeing a growing luxury market. Theyre definitely coming from the mass brands. So the cars that have been traded in for the cla are hondas, theyre toyotas, theyre nissans. So these are people buying highly equipped mass brands. So were all kind of meeting in this 30,000 to 35,000 price point. And the Mercedes Benz is an aspirational brand that they want. You were telling me before we went on year you think this continues for the rest of this decade, correct . How much will luxury sales outpace general sales . Significantly. So 2013 was an inflection point. This was the year we grew faster than the general market. Mercedes benz grew 14 this past year. And the market was up just 8 . Were growing faster than the general market. And were growing faster than the luxury market. We see this trend continuing. The economys recovering because of housing prices are improving across the country, stock prices are improving across the country. Those things feed luxury purchase. Something i dont think people grasp is the housing, stock market explain that for everybody. Perception of wealth, comfort and confidence. And when housing prices have recovered and when stock prices are at alltime high, it feeds that confidence. Steve cannon, head of mercedes usa, guys, on a day when theyre introducing the grownup baby benz, the cclass. Phils been bringing us great stuff all day from the Detroit Auto Show. This could be an specially tough year for commodities so says the global head of commodities at Goldman Sachs. Hell tell us why in just a moment. Mine was earned orbiting the moon in 1971. Afghanistan, in 2009. On the u. S. S. Saratoga in 1982. 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Thats nice. No hidden fees, no worries. Ally bank. Your money needs an ally. Commodities starting off the new year with a dose of volatility. Our own kay kelly joins us this morning with a special interview with goldmans head of commodities. Good morning, carl. Im excited to have jeff with us. He hasnt done an interview on cnbc in a number of years. Youre at Market Outlook conference. Welcome to the show. Good morning. Good morning. So talk to us about the commodities picture. Youre pretty bearish looking out on this year, right . I mean, you think the fed is changing stance, the stock market still has wind in its sails even though your colleague a couple days ago says the s p is lofty by any measure. Tell us about your broad outlook. I think its important to separate commodities like gold where the story you just articulated is the key driver versus more the industrial commodity such as oil and copper. And first Start Talking about gold, our view there really is driven by the expectation of the u. S. Economy reaching escape philosophy. When you think about a short on gold, which we have a target of 1050, it is essentially just a bet on a substantial recovery in the u. S. Economy. In contrast, when we look at the outlook for both crude oil and copper, the storys a little bit different. And theres two key themes. One is this rotation away from emled demand or emerging marketled demand to developed market demand. And the second theme is what we like to call a normalization in supply. Obviously the rotation away from em and 2 dm being dm less commodity intensive is more of a bearish dynamic. But couple that with normalization and supply which we see both in oil as well as in some of the key based metals, particularly copper, creates a lot of Downside Risk. In oil we are unwilling at this point to get very short. Just given the fact you have the disruptions in libya and iran. However, in copper we believe theres downside all the way down to 6200 really driven by the fact that you have less demand from the emerging markets and weve seen a significant increase in supply from 2 all the way to 4 . Jeff, this may be a dumb question, but if we are looking at escape velocity back here in this country, why is gold lost its power as an inflation hedge . Well, thats a great question because i get it all the time. Why are you bearish on gold when you expect the u. S. Economy to recover . I think you have to think about it in different phases of the business cycle. Were still below trend in growing. Once we get above trend and growing, and you create some scarcity in the economy, then you can create inflationary pressures. But we dont see that happening for, you know, at least another two to three years. So at this point as the economy grows it leads to higher Interest Rates as well as high real rates which is what creates the Downside Pressure in gold. However, i dont want to dismiss the story youre referring to. We think further out once you start to see inflationary pressures, you can even have rising nominal rates but declining real rates which would put upper pressure on gold prices. But thats in the future. So youve got a yearend projection of 1050 on gold, right, jeff . Which is a pretty bearish 12month outlook although longer term looking back to the 1200s at least for a little while. Lets talk about oil for a minute too. You mentioned it earlier, i know youre expecting brent to be essentially flat by the end of the year somewhere in the 110 range. On the u. S. Side t. I. s in the 90s. Some people i talk to think its going to drop much further and were going to see more of a gap. How do you see trading those two commodities . And where do you think the spread will be based on supply issues, bottleneck issues in the u. S. . Okay. Lets start with brent. And as you pointed out our forecast is relatively benign. Some people like to call it boring. But i want to emphasize that last year with brent it started the year at 111. 11 and closed the year at 110. 80. A 32cent decline in the price. Pretty boring. However, if you look at a strategy of being long a l roing front month, which takes advantage of the shape or forward curve in brent, you would have generated a 7 return over that time period even though you saw a 31cent decline in the price. I want to emphasize we still see opportunities in brent despite our benign outlook really driven by the shape of the curve. Turning to wti in the u. S. Market, there its a very different story. Really driven by the shale revolution. I want to go back and bring up the key theme we see across all the different commodities, which is this rotation away from e. M. Towards d. M. Or developed market demand. And its more pronounced at oil than any other market. I know weve heard this theme over and over, but i really want to emphasize in oil its striking. Last year chinese demand was growing slower than that in the United States. Now, people look at that and go, oh, its not real demand because its driven by the shale revolution and lower prices, however i want to emphasize is that the u. S. Demand no longer reflects strong gdp in the u. S. But it actually drives u. S. Gdp. So when you look at this uhhuh . I just want to ask one last quick question because woere running out of time. Okay. You had an interesting soybean trade as well as copper trade. Can you refresh my memory on what youre recommending . Yeah. On soybeans there we see significant Downside Risk coming into the may and spring time period. Again, same type of story where we see weakness in the emerging markets devaluation in emerging market currencies, particularly the brazilian rial. We expect a record harvest coming out of brazil. Our ones we want to be short are primarily beans, gold and copper. And theyre all really driven by, again, the same theme a rotation away from e. M. Towards the d. M. All right. Well, thank you so much, jeff. We really enjoy talking with you. Thanks for coming to us. Carl, over to you. Great stuff. Taking notes furiously. Well, that 1050 gold target is really dramatic. And goldmans been smart with their calls on gold in recent years. Always interesting to hear about oil as well. Especially we have news out of iran today. Absolutely. Its always a geopolitical story. Thank you. Kate kelly here at post 9. Back to dom chu with a quick market flash. Were talking netflix on fire. Actress robin right now work on house of cards, netflix presented a first time a service other than a broadcast or Cable Network has won a Major Television award. The company also announcing it was going to bring back the original series lilahammer for a third season. That big juggernaut of netflix continues to run higher this year in 2014. February 14th house of cards, cant wait. Thanks so much, dom. Take a look at shares of liquor maker beam today. Fullon rally mode after being acquired for about 14 billion, thats not including some of the debt. Is this good news for the liquor industry . Well talk about that in a moment. And the bells are about to sound across europe where theyve had mostly green arrows today. Well get that with simon in about three minutes. Tdd 18003452550 searching for trade ideas that spark your curiosity tdd 18003452550 can take you in many directions. Tdd 18003452550 you read this. Watch that. Tdd 18003452550 you look for whats next. Tdd 18003452550 at schwab, we can help turn inspiration into action tdd 18003452550 boost your trading iq with the help of tdd 18003452550 our live online workshops tdd 18003452550 like identifying market trends. Tdd 18003452550 now, earn 300 commissionfree online trades. Call 18886282419 or go to schwab. Com trading to learn how. Tdd 18003452550 sharpen your instincts with Market Insight from schwab tdd 18003452550 experts like Liz Ann Sonders and randy frederick. Tdd 18003452550 get support and talk through your ideas with our tdd 18003452550 trading specialists. Tdd 18003452550 all with no trade minimum. And only 8. 95 a trade. Tdd 18003452550 open an account and earn 300 commissionfree online trades. Call 18886282419 to learn more. So you can take charge of your trading. The european markets are closing now. Just about 30 seconds away from the close over there. Fair amount of green, simon. Sure is, in stark contrast to the u. S. The banks are a clear standout today. Thats partly because over the weekend pressure from some of the u. S. Players like bank of america and citi group, those are loosening of the rules moving forward from the basel group of doe nnatordonators. The hugest story remains the peripheral bond market in europe. Mainly its sovrns somebacks out there raising capital by selling bonds. Uk retail is real interesting. Two interesting stories there. William morrison, which is one of the big supermarket chains, is reportedly thinking about selling off 10 of its supermarkets to raise about 1. 3 billion and return that cash to shareholders. And also debenhams, a sportswear retailer has bought a 4. 6 stake in this chain. Hoping to reinvigorate whats going on there. One more before i return you to carl. The french first lady, pictured here, is about to leave hospital. Shes been in oh, thats not her. Shes been in the hospital now there you go for three days for some rest and some tests after it was alleged that her boyfriend, the french president , francois hollande, had an affair with the french actress there. Im not so worried about affairs as they are here in the United States opinion polls would indicate, however tomorrow mr. Hollande has his annual News Conference mainly to talk about the economy. Which will be a very interesting watch. Almost governor christieesque in his fascination. Fighting a twofront war. Thanks, simon. Lets check on energy and commodities as well. Berthas at the nymex. Hey, carl. Weve seen some prices bounce back a bit as the dollar has edged a bit lower from its highs this morning. Of course the nuclear deal with iran that will see some sanctions ease as of january 20th for six months provisionally, certainly weighing on oil prices. But brent interestingly enough, which would be the one that would be more impacted you would think today is finding a bit of a floor. That could be a bit of Short Covering there. The ice folks reporting that Fund Managers cut their net long positions on brent by 26 in the first week. Overall the speculators getting a bit more bearish on Energy Prices particularly when it comes to oil and gasoline. But whats interesting is that we are seeing the heating fuels, both nat gas and also heating oil coming up along with it because we are expecting to see a return to the cold weather here over the next couple of weeks. And addson armstrong at tfs pointing out we could very well see a record withdrawal of nat gas when we get the inventory numbers this week because of that polar vortex that we all suffered through in the last week. As far as Precious Metals with the dollar coming off of its highs of the morning, we are seeing gold a little bit higher there too as well. Analysts thinking may well be some Short Covering. Folks fairly bearish particularly when it comes to gold, but the Precious Metals this morning doing a little better than copper. In part as well, carl, as people speculate that last weeks disappointing jobs number could have the fed take the foot off of the pedal when it comes to cutting back on its bond purchases. Back to you. Bertha, thank you for that. Bertha coombs at the nymex. Bob pisani is back here at post 9 still on a high after seeing neil young over the weekend. Just one of the great concerts ive seen in the last several years. Did several at carnegie hall. Youll see an album out of this. What everybody wants here at the stock market is a little more volatility. A little more price movement. Its not people are worried, theyre just a little disappointed and surprised. This has us concerned over the week. The dow transports are up nicely this year and industrials are lagging behind. Obviously transports are up because oil is down and the Airline Stocks have been outperforming. Okay, thats sort of like a dove, but its more complicated than that. This underperformance is what im worried about. Weve had some major sectors like telecom and energy stocks, theres telecom, at t and verizon dragging things down, but oil stocks, chevron notably weak overlow oil, exxons been weak and microsoft a real laggard. Its not just transports outperforming. Some very big names in the dow have been weak recently. Thats getting more attention. Another thing getting a lot of attention is the dollaryen. Theres a correlation between the dollaryen relationship and how the s p 500 performs. Put that up on the year and you can see the correlation is not that bad for the year. Look, this is one year. Theres the s p 500, there the dollaryen. It works pretty well. When you start seeing this collapsing a little bit, weve seen it recently, the yen has been very strong. That creates a lot of concerns because thats the big liquidity trade. Put up the relationship in the last month and its held together. Recently though, look, the yen very weak today. The japanese equity markets were closed today excuse jpn very strong. Keep an eye on that. Everybody talking about this relationship. In terms of the u. S. , stocks here networking stocks have been very strong. Juniper with elliott concerning a lot of stakes. I get this a lot and i cant answer that, but i hope the authorities are looking into that. F 5 networks also up an upgrade at william blare. Bottom line is were holding up well. Put up Retail Stocks real quick and youll see the real weakness. Thats been a problem with all the companies coming out saying, guys we are not seeing any strength continuing in january. Thats a weak board we saw. Thank you, bob. Some big booze news this morning. Suntory buying jim beam. The largest acquisition so tar this year. Sarah isaacsons back at hq with that. The maker of whiskey and adding cognac to its perform. Were talking Japan Suntory offering to pay a 25 premium to beams closing share price friday. In share beam trading just around the deal price after the spike. Analysts i spoke to say you probably wont see other bidders coming in here because of that high premium offered, also they already have relationships, suntory and beam, and theres a 275 million breakup fee. The real big winner appears to be Pershing Square as of september the last filing period held the top position about 12. 8 stake in beam meaning hes made more than 370 million on the position just since friday. Now, the bigger story here behind this deal, growth in the spirit market and growth in the United States. Check this out. Over the last five years spirit consumption in the u. S. Is actually growing faster than wine drinking. And its coming at the expense of beer drinking. If youre wondering, vodka dominates in terms of spirits and whiskey and rum. Its helped spirit sales for the entire industry grow around 5 to 6 clip this year. Thats almost back to the prerecession average, which is about 6. 5 growth. Thats according to bernstein research. One reason that youve seen beams stock outperform its nearly doubled since back in 2011 when it debuted it came out of a threeway split of fortune brands. According to analysts was seen here as one of the last remaining public spirits companies if you look across the entire industry. Not many left. Diageo is market leader, suntory is actually number three. So theres been a lot of momentum in this business. Spirits are high, craft is the trend, carl. And that is a high margin business. Fun fact here, guess what the Fastest Growing segment in the United States spirit market is . Im going to guess tequila, no . Not tequila. Thats a fast growing one, but actually irish whiskey. Irish whiskey. Thats so funny. I got a bottle of baileys for christmas. Youre on trend. Thank you, sarah. Meantime, big breach of Customer Data at target still on the minds of shoppers everywhere. What can target and other major retailers do to prevent it from hitting the bottom line . Well talk to the former ceo of costco, jim sinegal, in just a moment. Im beth. And im michelle. And we own the paper cottage. Its a stationery and gifts store. Anything we purchase for the paper cottage goes on our ink card. So you can manage your business expenses and access them online instantly with the Game Changing app from ink. We didnt get into business to spend time managing receipts, thats why we have ink. We like being in business because we like being creative, we like interacting with people. So you have time to focus on the things you love. Ink from chase. So you can. Of the dusty basement at 1406 35th street the old dining table at 25th and hoffman. And the little room above the strip mall off roble avenue. This magic moment it is the story of where every great idea begins. And of those who believed they had the power to do more. Dell is honored to be part of some of the worlds great stories. That began much the same way ours did. In a little dorm room 2713. This magic moment this magic moment voseeker of the sublime. Ro. You can separate runway ridiculousness. From fashion that flies off the shelves. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. At the top of the hour shares of beam are soaring on acquisition news. Been telling you for months on Halftime Report hes been buying it. Next well talk to captain kelly shorting gold. Find out what other hot plays she likes right now. And Goldman Sachs raising a red flag over u. S. Stocks, but where in the world is the best place to be . Its all straight ahead on the half. Carl, see you in a bit. Scott, sounds good. Targets brand image taking a major hit following last months massive data breach. Ceo gregg steinhafe saying his company is working hard to regain the Publics Trust. Its very challenging times for target, i can tell you that. Its a real punch in the gut. But throughout this entire crisis weve had a singular focus on really doing the right thing by the guest. Our Courtney Reagan at the National Retail federations big show in new york with the founder of a store known for putting consumers before wall street, former costco ceo jim sinegal. Thats right. Im here with the cofounder of costco, former ceo stepped down in 2012. And the recipient of the gold medal award. So congratulations for that for all your contributions to retail. Thank you, courtney. Youre welcome. And everything weve been talking about here has to do with data security, protecting the consumer so they feel safe shopping in the store. As a board member on costco, do you feel confident that costco has done everything they can to protect the consumer when they shop . Well, we think we have. But we dont know. Obviously im sure target and Neiman Marcus also felt that they had taken the precautions that are necessary. And were going to have to take a much closer look at everything that were doing and we have a limited exposure to credit cards because we only accept American Express at our warehouses. But nonetheless we have to make sure that they havent been compromised. So far holiday sales turning out good from what youve been able to release from costco . A little surprising to the market, better than expected amid a shortened season, tough weather trends, what did costco do right over the Holiday Season . Well, as you might guess it was a little anxious up until the last couple of days before christmas. But things happened to open up at that point in time. The weekend before christmas and monday and tuesday were both very good days, which kind of saved the season, i think, probably for us and a lot of other retailers as well. So we had a good reaction at the end, but of course a lot of anxiety up until that last minute. And weather was really blamed a lot for the traffic trends, traffic is down pretty much across the board in brick and mortar retailers. Is costco concerned about whats going on with the consumer as they move to online and away from those brick and mortar Shopping Trips . Well, it doesnt just rain or snow on us. True. It happens to everybody. And the consumer eventually has to come out. We have a saying that the only thing retailers never run out of is excuses. True. But the weather is something we talk about every year. But in truth you got to do your job and you got to get ready for the season. If you dont do it on tuesday, youre going to do it on wednesday and thursday. Like you mentioned the Holiday Season was choppy, stronger perhaps towards the end. What does that tell you about the consumer . Theyre only buying when they have to when they run out of time when its christmas . I think theres a little apprehension on the part of the consumer, certainly. When theres anxiety about whats happening with the economy. I think the calendar also was a shift. It was a significant shift. There were six less shopping days between thanksgiving and christmas this year than the year before. But, you know, all of those things have a tendency to work their way through the system. And eventually did get straightened out in the last couple days before christmas. So costco like many other companies spend a lot of time and resources on their strategy, reaching the consumer, deploying everything correctly in store. But you have these external factors. For costco youve got fluctuating gas prices, Foreign Exchange rates, how much does all of that play into the bottom line when youre looking into the business . Is it hard to separate out what the external factors are and internal factors as an investor would be looking at costco . You have to learn to deal with them. Thats why they call this work. You got to be able to take whats happening and take the punches and figure out how youre going to adjust your business. And be able to be nimble. You know, thats one of the things thats very necessary for all of us in business in the whole business community, not just in retail, to be more nimble than weve ever been in the past. So just sort of as a last final question, weve seen a lot of activism when it comes to consumer companies, retailers, as a board member of costco, the company you founded, do you worry about that activism investor coming in and trying to move the company in a different direction . No, i dont think so. Were very resolute about what were going to do and how were going to take care of the consumer and work with them. And so the fact of activism generally speaking is good. It makes you open your eyes and determine what it is youre doing with your business. So we dont concern ourselves about that. Great, thank you so much, jim, for joining us. Congratulations on your award, very welldeserved. Thank you, courtney. Thank you very much. For now back to you, carl. Courtney, send our best. Courtney reagan at the National Retail federation. Have you ever thought about building your own computer . Thanks to todays squad breakthrough, its easier than ever. Well show you exactly how it works in just a moment. In my world, wall isnt a street. Return on investment isnt the only return im looking forward to. And my parachute definitely isnt golden. [ male announcer ] for some, every dollar is earned with sweat, sacrifice, courage, which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Start investing with as little as 50. Our next guest is turning the masses into makers, kind of computing lets kids build their own minicomputers using microchip raspberry pie. This diy has backers like Steve Wozniak and nancy strict ler. John, i believe we actually have one of these right here onset, right . We do. Pretty cool. I mean, alex, i want to ask, weve seen a couple of these products so far where kids can piece things together and kind of code. How big is the market for smart kids . I mean, seems like it might be kind of small particularly in the u. S. Judging by the stats. So is this a labor of love . Or do you think its really going to take off . Well, you know, you look at the raspberry pie, the kind of single board machine that powers the computer. That alone has already sold 1. 5 Million Units in just over a year. I think theres a real urge out there and not just among kids to start tinkering and playing with technology again. Which really takes us back to where computing really started. I think, you know, not only is there a big market for people who want to start making their own computers, but there will be a big secondary market down the line of people who are kids today inventing the next machines, the next devices that shape our cultures in the next decade. So best case scenario, what can kids do with this . And how old . Are we talking second graders, third graders, fourth graders . What are they going to be able to put together with this kit . So the youngest person to make the computer was 6 years old and the oldest was 81. You can make some Pretty Amazing things with it. You can make your basic computer. You can customize it. You can make it diy, speaker, bump your favorite tunes, you can make games like pong and game craft. You can make a secret chat room to talk to your friends. Anything you would be able to do on what you might call your smartphone or a normal pc, you can do with kano, but you shaped it yourself. You control how it works. You get to design your own game characters, your own rules, your own sounds, your own movies, a totally customizable totally open spot. Obviously the backing and endorsement of wozniak raises eyebrows, gives huge credibility to the product. What sort of aspirations does he have . And do you have for this product . How many hands can you get one of these into . Well, i think, you know, a lot of people are looking at the world of Technology Today and looking at the sort of devices we carry around in our pockets. Weve all become very avid consumers of Technology Since the pc revolution, but only a very, very small fraction, 1 of 1 know how to actually create with technology. So, you know, i think for a lot of people right now its not just about, you know, minting Silicon Valley millionaires. Its about broad based distributed growth. But a tool thats going to prompt innovation in places like sier lion. This is where the emerging generation is driving and theyre going to be driving the future. We want to give them a tool that works, simple, fun and affordable as well. Whats it going to take for us as a culture to get more into hands on things again . Googles motorola has talked about a smartphone theyre working on. It seems theres a number to get afoot in terms of poking at the screen in terms of getting people hands on. But the culture seems to have moved in a different direction. Is it going to take a different kind of event . Whats it going to take to bring people together and get their hands dirty again . Well, the notion we had with kano was take something that was quite complicated, a raspberry pie, an open source lennox board and make it as simple as lego. We started with just the book, weve now evolved into software, peripheral. We tested the kit in dozens of schools, different languages, different age groups. The one common factor is simplicity. Speak in a human voice. Build things up step by step, like your favorite video games growing up, like lego. Thats something we can appreciate no matter how old you are. Tech has become for many sort of mystifying, something that only a quote unquote geek or nerd could understand. I think we basically need to look at our devices again and get excited and say this can be an expressive media for me to be creative no matter what my job and no matter where i live. That is exciting with a lot of possibility. I think we need the 6yearold on. Thats the next big booking for the show. Yeah, thats not my 6yearold. Nor is it mine. And the 81yearold as well. Right. Alex, thanks so much. Fascinating stuff. Joining us this morning from kano in london. Youre going to get to work on this i assume in the commercial break. Its probably going to take me a while. When we come back, groupon taking a shot at amazon with a new acquisition this morning. Well tell you about that after the break. Be a victim of fraud. Fraud could mean lower Credit Scores and higher Interest Rates when you apply for a credit card. Its a problem waiting to happen. Check your credit score, check your Credit Report at experian. Com. Theres nothing like being your own boss and my customers are really liking your flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. I took medicine but i still have symptoms. [ sneeze ] [ male announcer ] truth is not all flu products treat all your symptoms. What . [ male announcer ] alkaseltzer plus severe cold and flu speeds relief to these eight symptoms. [ breath of relief ] thanks. [ male announcer ] youre welcome. Ready . Go. A lot of nominated shows tonight are actually on netflix this year. House of cards, orange is the new black, yes. Enjoy it while it lasts, netflix, youre not going to be feeling so smug in a couple years when snapchat is up here accepting best drama. Amy with a great line at the Golden Globes last night. We were talking during the break, john, i mean they can laugh it up in hollywood, but its not out of the realm of possibility. It really isnt. I was thinking thats a nice extension because this disappearing picture thing isnt probably going to last forever. Some of the news today kind of underscored that for me, groupon buying whats it called fashion flash. Yeah. Which raised 112 million, sold for 43 million. So whats interesting to me about this landscape is youve had fab and guilt group, both these kind of flash Design Fashion sites that have had to retrench because they try today grow too fast. Then youve had groupon and living social, these local flash sites also having to retrench. Groupons trying to gobble up a fashion site, extend its brand. But these were so hot a couple years ago and now theyre kind of fighting for survival. Yeah. And obviously Companies Much different size but it does bring to mind sort of the debate about valuation of a twitter. At goldman today after a series of sell ratings in the past couple weeks, goldman says were going to keep our buy, up our price target to 65 because theyre innovating at a faster pace and thats going to lead us to the ebitda others arent so sure is coming. And shows whats so tricky about the stage of growth. Amazon was able to start with books at the time and then have bezos was able to have the vision to extend in the right way at the right pace. He didnt stay stuck in the same place. He didnt grow too fast. Were seeing startups from snap chat to fab to guilt trying to strike that balance between not moving fast enough to extend to the next thing and moving too quickly and kind of blowing things up. So well see if twitter is able to do that. Theyve got a great base in mobile, but theyre going to have to extend that, i think, to Something Else beyond what we know of as twitter today, beyond what we know of as vine in order to really grow into that valuation. February 5th is the earnings call. Well get a lot more information. That points been made is you really know very little off of the ipo, the real information and data is forthcoming. John, good to see you again. Thanks for sticking around for a bit. Lets get back to headquarters. Scott wapner and the halftime. All right, carl, thanks so much. Welcome to the halftime show. Starting lineup today is pete najarian, stephanie link, joe and mike murphy. Lets get to our game plan for the second half. Thats the spirit, beam shares soaring on news of its 14 billion deal. Were going to hear today from mario gaveli who told you on the half to buy that stock. Hot commodities hedge funder Kathleen Kelly on why shes shorting gold and where shes making money in that space. We begin with the markets and a big call today by Goldman Sachs saying u. S. Stocks are overstretched. The firms Global Strategy Team downgrading u. S. Equities versus other markets. Pete najarian, to you first. Is that the right call . Well, i can understand why they made the